An empirical study of performance measurement in manufacturing firms
Purpose ? The recent performance measurement literature suggests that organizations should put more emphasis on non-financial measures in their performance measurement systems, that organizations must use new performance measurement approaches such as the balanced scorecard and that measures should be aligned with contextual factors such as strategy and organizational structure. The purpose of this paper is to assess the extent to which organizations are following these prescriptions. Design/methodology/approach ? A survey of a sample of Canadian manufacturing firms was conducted. In the questionnaire, organizations had to indicate the extent to which they use 73 performance measures. They also had to respond to questions about determinants such as strategy, organizational structure and environmental uncertainty. More than 100 organizations responded to the survey. The response rate was 50.5 percent. Findings ? The results show that manufacturing firms continue to use financial performance measures. Despite the recommendations from experts and academics, the proportion of firms that implement a balanced scorecard or integrated performance measurement systems is low. Furthermore, organizations that use these approaches are not employing more extensively non-financial measures than those which are applying traditional performance measurement approaches. This research project also shows that there are some significant relationships between the types of measures and contextual factors like strategy, decentralization and environmental uncertainty. This research finally demonstrates clearly that there is a need to develop a theory that explains how firms can use their performance measurement system to enhance their performance. Originality/value ? This paper provides information on performance measures used by organizations and their association with organizational determinants.